Keywords: starbucks service differentiation, starbucks main business
Starbucks is guided by 4 proper pillars. An excellent coffee base, great products that are improve the coffee experience, look after the environment and the Starbucks experience.
While Starbucks may be known for its top quality caffeine, I personally believe that its core business is the "Starbucks experience". The creation of Starbucks culture in the community clearly demonstrates Starbucks is a "visitors to people business". Starbucks quest is "to encourage and nurture the human spirit - one person, one cup, and one community at a time. " (http://www. starbucks. com. sg/our-heritage. html). With these in mind, I can strongly conclude that Starbucks center business is its services (Environment, culture, interconnection) and is recognized by its products (Coffee).
How will Starbucks provide service differentiation?
Knowing that services are intangible, inseparable, changing and perishable, Starbucks makes certain that their staffs are well trained. Insurance agencies well trained and cared after personnel, they are valued by Starbucks. Training ensures a "One speech" coverage where all Starbucks worldwide have a consistence "flavour" with some local taste across the world. Their staffs are also trained to create brand consciousness and pay attention to the customers. It really is through the personnel that the "Starbucks culture" is formed.
As it is visible that Starbucks's main concerned is customer's feedback and concerns, the complete service experience differs from its opponents because Starbucks listens. By hearing its customers, Starbucks could be more locally relevant and local customers can hook up to.
Starbucks is made upon word of mouth; something which only happens when there is a strong connection with between the customers and shop.
Evaluate Starbucks atmosphere/physical area.
While accomplishing this project, I frequented three different Starbucks around Singapore and one in Malaysia; Johor Bahru; City Square Shopping mall. In Singapore, I visited those people at Bugis Junction, Orchard Ion retail center and Tampines Shopping mall. In all four outlets, I did so the same actions. I would ask the staff for recommendations, and I'd order a green tea extract Frappuccino and spend between 1-2 time (1/2 one hour at the Malaysia shop due to time constrain) observing.
I witnessed that in all four different outlets, the concept was almost identical. The same wooden and homely feel which makes one feel at home and relax. Even in the Malaysia wall socket, I felt that I was at Starbucks Singapore.
In addition, I seen that the Starbucks brand was everywhere throughout the store; from the store company logo, to the cups, to the sandwich wrapper and even the condiments provided (Glucose). There have been the same cultural responsibility poster in all three Singapore retailers plus they were prominently located throughout the shop. A couple of brochures regarding interpersonal responsibility right above the condiment area in every three Singapore Starbucks outlet stores.
All four Starbucks seen provided almost the same level of service. Each of them provided the same level of great service and showed the same eagerness when offering me. (The ones at Malaysia did have some terms barrier nevertheless they took the effort to speak good British back to me).
I also observed that three Starbucks shop in Singapore can be found near an available area. All three shops have both indoors and out-of-doors sitting.
Something that a lot of would not get sucked in is the roasting of the coffee beans. The sound and smell from the roasting makes the atmosphere lively and stimulating. However I did not see any roasting machine around the corner.
What will be the advantages and weaknesses of the atmosphere? What you can do to improve the atmosphere at Starbucks?
In my personal opinion, the effectiveness of this atmosphere would be that customers have a choice of where to be sitting, indoors to feel cool or outside to soak up the sun. This is a good set up as customer's needs differ. Some might need a warm environment after being within an air-condition place all night, where others would appreciate a great place. The sound and smell from the roasting of coffee also makes one want a cup of coffee. In addition, the lack of technology used in the surroundings also creates a nostalgic feel.
However the weaknesses in my opinion will be the simple fact that the outdoor sitting area is directly under sunlight. A advised possible solution would be installing a beach umbrella, it would be perfect. Another weakness would be the times spend on table occupancy merely to relax and chill. This impacts potential dine in customers' opportunity. One solution would be having more car seats as I recognized Starbucks sitting agreement are quite generally spread (Which may be a good thing).
Part B (5 points): Know what spaces in the 5 Distance Model of Service Quality (Appendix A in your textbook) that Starbucks is currently facing. Next, provide ideas for improvement for each and every gap that you believe Starbucks is currently facing.
There are 5 Difference in the Space Model. Starbucks do not face Distance 1 (Consumer anticipations versus management perception) due to the fact that it's their culture to hear customers and their feedback/suggestion which will be communicated to the management through the personnel. By constantly hearing and checking for both customers and staffs feedback the management perception will always be grounded.
Starbucks, in my own personal judgment have adequate dedication to service quality. This is seen from its plans and being put in to activities by its service staffs. Starbucks makes its service quality standard feasible for its service personnel to carry it out. This is recognized by Starbuck's quality training program to maintain standardization and the targeted goal for everyone to check out. Starbucks also have enough service personnel to focus on all customers purchasing. Starbucks personnel also received great benefits and fair income. "Starbucks offers detailed benefits deals to eligible associates working at least 20 hours weekly" (http://news. starbucks. com/article_display. cfm?article_id=225) However, from my observation, there's one little problem that Starbucks is facing. Due to the large amount of customer during the peak period, there seems to be a slight delay in the clearing of tables for another band of customer. This problem can simply solve if Starbucks instruct its customer to put their own leftovers. Hence with each one of these at heart, Starbucks is not facing any Gap 2 (Management belief versus Service Quality Specification) problems.
Because Starbucks depends more on individuals rather than on technology, the chances of facing Distance 3 (Service Quality specifications versus Service Delivery) will be more. Despite having all the trainings and enforcement, you can find surely a time where services provided will varies. One particular example I experienced was as i asked for extra dairy for my coffee, some outlets provides the dairy without question asked while some other outlets will require me to bring my coffee to the counter-top to be confirmed. This might be small but it obviously shows the difference in activities. This is merely one particular example to show that Starbucks is facing Difference 3.
Recently, there have been quite a substantive amount of special offers from Starbucks. The products shown on promotional posters are little or nothing close to genuine. This is made even most severe when there exists huge group purchasing the same products. When service personnel rushed out order, the quality fall short on that which was shown and described in the poster. I would say that on normal days and nights, Starbucks indeed do not face Distance 4 (Service Delivery versus Exterior Marketing communications). However with special offers on going, Distance 4 is actually evident from customers' viewpoint.
Gap 5 (Expected Service versus Perceived Service) in my own personal opinion will can be found in the majority of not absolutely all companies. As the company expends, this Gap gets bigger. That is true for Starbucks. But a very important factor for sure is that Starbucks does well in lessening Gap 5 through its strenuous training and great personnel welfare. "We're called companions, because it isn't only a job, it's our love. Together, we adopt diversity to create a place where each of us can be ourselves. We always treat one another with value and dignity. And we maintain each other to that standard. "(http://www. starbucks. com. sg/mission-statement. html).
Part C (16 details): Growing Marketing Strategies for Starbucks
Conduct a SWOT examination of Starbucks. This should include 2 items for each component of the SWOT (2 advantages, 2 weaknesses, 2 opportunities and 2 hazards).
Strengths
Location and operating hours.
Starbucks stores are positioned in high traffic, high visibility locations, with the thought of acquiring crowds from the different heartland with their signature and seasonal drinks. Having to be located at easily accessible perfect areas, Starbucks have the ability to get in touch with more customers than their rivals. With 80 outlets in Singapore which 18 outlet stores that are working 24 hours per day, 7 days a week, Starbucks provides more convenience to its customers (http://www. starbucks. com. sg/stores-24h. html). As people likes spending longer time at cafe getting up with friends, especially during the weekend's nights, having a cafe that operates 24 hours will appear as a more attractive option for the clients.
Established brand name.
Starbucks is an established brand with huge advertising presence that may be easily acknowledged by many. Espresso drinkers trust the grade of coffee that Starbucks sell, plus they relate coffee to Starbucks instantly. This enables Starbucks gain a competitive advantages over their competitors. Aside from caffeine, consumers connect the brand name Starbucks to calming and debate. These factors differentiate Starbucks from their competitors and fast customers to choose Starbucks as their first choice. Also, having a recognised brand name means that Starbucks spend less effort in their marketing campaign. Instead, the commitment customers will act as the mobile advertising campaign as they talk about their experience with their friends.
Weaknesses
Inconsistency in the grade of the beverages.
The inconsistent quality of caffeine across wall plug leads can lead to customer dissatisfaction. I do notice that the green tea extract Frappuccino that I ordered varies in tastes across outlets due to the glucose syrup that the staffs have added into the drink. The client could find the sweetness suitable in one electric outlet but may find it undesirable at the other. Often Starbucks will give a new drink as a replacement, but this ended up as an additional charge to Starbucks and an awful experience for the customer. This is why Starbucks always directs its personnel for training.
Dependency on dealer.
Dependency on solo supplier might run the chance of non-delivery. Hence the need to maintain good relationship with suppliers and also to engage more than simply one supplier should not be neglected. Starbucks count on the suppliers and vendors to provide high quality products. Any shortcomings of the suppliers and sellers will damage Starbucks reputation and potentially impacting Starbucks results of businesses. A vendor or supplier's failure to meet Starbucks specifications, provide products in a timely and useful manner and comply with applicable regulations may negatively impact Starbucks business and success.
Opportunities
Delivery services.
Customers who beliefs convenience will also welcome the idea of Starbucks providing delivery services. Due to certain constraints imposed by the company or the heavy workload, any office crowd might not have the ability to step out of their office for caffeine. Needing to provide delivery services will add value to the services that Starbucks offers. In today's century where people get their purchase done online, Starbucks should make online ordering possible to avoid sacrificing this band of IT savvy consumers to their competitors who are already providing online buying services.
Organic products.
While the approach to life of people has changed over the years, addititionally there is an increase in throw-away income and people are more inclined to invest on more prime products. Thus, Starbucks should find ways to appeal to them. Individuals are always on the lookout for healthier options. Providing low-fat milk is no longer sufficient to gratify the consumers. Customers want for organic products and entire meals products which Starbucks are lacking. In view of selecting pastry, Starbucks may replace a few of the buttery products with entire meal items. This may be especially useful approach in an maturing Singapore. Starbucks should make adjustments to their menu to focus on the older group.
Threats
Economic problems.
Starbucks relies very much on consumers. Their income will result in the changes in sales design. Poor economy may lead to consumers having smaller money for acquisitions. This will result in minimal customer traffic and average value per exchange. Over time, this will adversely impact Starbucks financial performance since revenues are minimal. Such unforeseen economic problems will also cause a rise in item cost and this lead to higher cost price. This place Starbucks in a difficult position as increasing the price tag on their product will further impact the client traffic.
Climate changes.
The resource and price of espresso can be afflicted by multiple factors in the producing countries, including weather, politics and monetary conditions as well as the activities of certain organizations and organizations that have attemptedto impact prices of inexperienced coffee through contracts establishing export quotas or by restricting coffee supplies. The supply of caffeine will impact the jogging of day-to-day business should there be any shortage of coffees. You will see an adverse effect on Starbucks success when they are not able to match the demand.
What tactical initiatives could Starbucks undertake for each element of the merchandise Development Grid (see Slide 12, Chapter 3 records). Please list 2 initiatives for every aspect in the grid (2 for product development, 2 for market development, etc).
Market penetration
More Advertising.
Starbucks is one company with little advertising done to market its product. One can hardly find advert of Starbucks on tv set or magazine. Hence, customers will have to count on Starbucks's website/Facebook pages or through word of mouth to learn of any recent revisions on Starbucks such as new product launch.
This is a dangerous act as it means certain customers might be not aware of the new product kick off if she or he does not check for improvements. Starbucks should take part in more promotional initiatives, with the idea of updating the current customers and reaching out to the new customers. Also, Starbucks may consider becoming the sponsor for several situations and which eventually; provide them with a chance to advertise their products.
Self-service water point.
I discovered that Starbucks do not provide water point and customers have to queue for both order and ordinary water. Such an take action will lead to unwanted delay for individuals who are queuing for purchases. Hence it is strongly recommended that Starbucks have a normal water point create where customer can help themselves with the ordinary water. Because it is a self-service drinking water point, no additional staffs must be deployed to place at the water point. Moving forward, this will alleviate the queue at Starbucks and also, it is improbable that the customer will slice queue in their attempt to get a glass of plain normal water from the staff. On top of that, staffs can achieve productivity at work since there exists less distraction from the customer who interrupts those to obtain a glass of plain normal water.
Market development
Loyalty programs.
In my personal thoughts and opinions, The Starbucks Cards, which aims to maintain and promote loyalty, has failed to reach its maximum capacity. Starbucks need to increase the ad on the Starbucks Greeting card to reach away to more people, such as advertising it on mags and newspaper instead of relying on its websites and customers.
On top of that, more benefits should be unveiled or otherwise, the customers can't find any distinctive factor that identify Starbucks loyalty greeting card from its rivals. For instance, Starbucks may customize uniquely presents for commitment customers rather than just having them to enjoy complimentary beverages after a specific number of acquisitions. In addition, there is a high tendency that customers neglect to bring their Starbucks Card while purchasing. Hence, allowing the clients to provide the staff with the NRIC quantity to clock in the commitment points will be a good option.
Delivery services.
Till date, there is still no specialty espresso company in Singapore that provides delivery services. To be the first company that initiates this notion would pose a substantial hazard to its competition since delivery services provide much convenience for customers. By offering delivery services, we can focus on customers who are too busy to come out of their office or home but yet at the same time, they would like to have some espresso. A fresh customer portion!
Product development
Since Starbucks main product is the Starbucks experience, I'll focus on "Enhancing customer services".
It is preferred that service personnel attend courses related to marketing communications and complaints handling to equip them with the relevant skills in providing professional services to the customer. I have observe that most service staff doesn't have much communication during customer discussion except for the short second where the customer put an order.
It would be good to activate the customers in small informal conversation to enhance the overall service experience and build customer commitment. Nevertheless, it's important to notice that needing to achieve this is only going to put Starbucks on par with its competitors. To stick out from its opponents, Starbucks service staff should take the time to remember the client and their requests, should the customer revisits. To understand this started, they may consider requesting the customer's name and pen it down on the cup, just when they pen down the drinks order on the cup. When the drink is ready for collection, the service staff will call out the name rather than their typical practice of getting in touch with out the purchases. Such customer support with a individuals touch goes a long way to improve customer relationships and satisfaction, in doing so resulting in increased business and income.
Increased customer satisfaction.
One of the region that customer aren't entirely satisfy with Starbucks is their variety of products. For a person who always would go to Starbucks, all of the products bought from Starbucks is limited. At these times, customers tends buy from other retailers. Hence it is essential that Starbucks present new items over a monthly basic. Customer value new items and they will be thrilled with Starbucks introducing new items regular monthly. This is a great way of keeping customers. Also, Starbucks should revisit the costs of their products. As the price of the Starbucks's product are believed to be on the bigger end as compared to their competitors, it might be a good idea to ensure that the merchandise sold is indeed affordability.
Diversification
Starbucks Ice Cream.
Working in the Ice Cream industry for more than a year, I feel that there is a great market that Starbucks can tap upon. As Singapore is a warm and humid country, Ice Cream would be a good solution that Starbucks can look in to together with its current frigid beverages. Different types of coffee and tea flavour snow cream would diversify Starbucks market.
Organic Products.
Also a chance, Individuals are always looking for healthier options. Providing low-fat dairy is no longer sufficient to satisfy the consumers. Customers are looking for organic products and entire food products which Starbucks are lacking. Because of selecting pastry, Starbucks may replace a few of the buttery products with complete meal items. This may be especially useful approach in an aging Singapore. Starbucks might want to make adjustments to their menu to cater to the older crowd.
Sources:
http://www. starbucks. com. sg/our-heritage. html
http://information. starbucks. com/article_display. cfm?article_identification=225
http://www. starbucks. com. sg/mission-statement. html
http://www. starbucks. com. sg/stores-24h. html
